Google Spreadsheet offers limited set of features with no support for Charts or Excel Macros. You can sort data or use the 200 functions and common spreadsheet formulas for doing basic calculations of numerical data.

Industryexperts feel that Google Spreadsheets may pose a threat to Microsoft Excel but I think otherwise. Though Google says it's working on improving printing, charts, filtering and "drag and drop" features, in the current state Google Spreadsheet may offer competition to other web-based spreadsheet software like NumSum, ZohoSheet, JotSpot Tracker, iRows or wikiCalc but not to the rock-solid Microsoft Excel. They are still miles apart.

Update: Just had a word with Zoho guys and here's what they have say about Google Spreadsheet:

We knew the big guys, especially Google, will be coming soon into the Web 2.0 space. We don't see them as a threat. Instead they help us indirectly like when folks like you mention us along with such news, we get new users! And some of them love us (instead of say, Google's Writely) & stick with us. Also, we think we can offer more value for the enterprise market.

More players mean more competition which puts pressure on the companies to innovate. Consumer is the king here.